50 – VC, M&A and IPO Markets, Steward Health, Anthropic, Stability AI, and the White House AI Roadmap

Vic: [00:00:00] Yes, we made it. It’s been almost a year doing this.

Marcus: Yeah. I think they say, once you get done with your first hundred episodes, then you can start taking yourself seriously. So we’re halfway to being, being serious. Yeah. Halfway halfway.

Vic: Um, we can get some big sponsors. I can be a millionaire and, uh, not do investing.

Marcus: I actually read, uh, email newsletters on podcasting and like the industry and all that kind of stuff. And I just. I can tell you the trends are not in your favor, my friend. So, you know,

Vic: pretty crowded out there. Yeah. Sponsors.

Marcus: Yeah. Yeah. And, uh, and look, it’s not even looking good for, uh, for old guys talking about geeky stuff.

Marcus: You know, you’ve seen the Andrew Huberman stuff that happened this week.

Vic: So,

Marcus: uh, the New Yorker, I listened

Vic: to his stuff, but I, I didn’t hear the, what happened.

Marcus: Yeah. I think is the New Yorker. They did a, um, a cover story, uh, expose a hit piece, whatever you want to call it, but basically, um, I guess they, they [00:01:00] uh, were able to find five different women who he’s been having a relationship with all at the same time.

Marcus: Um, and here’s the thing, like Huberman has never, I don’t think he’s ever talked about his personal life. I don’t think he’s ever sort of claimed to be a saint or anything like that. But I think squeaky clean, you know, Stanford professor offering information on science, it was, you know, it was a revelation.

Marcus: Let’s just say like that, that, that, that, That that was, um, what is private life actually looks like. So anyway, you know, geeky, older guys talking about nerdy stuff on podcasts are under fire. I just wanted you to know that.

Vic: Well, that’s a lot more energy than I can muster up. I think I love my wife. And I’m also too tired and old and lazy to have five girlfriends simultaneously.

Vic: So

Marcus: part of the story was just about around like the amazing coordination and energy he had to have to, to navigate all. Yeah, yeah, yeah, yeah, yeah, yeah, yeah. To time it, the communication and all that kind of stuff. Yeah. [00:02:00] I don’t think we need that because we’ve got portfolio companies. I’ve got, you know, I got, I got 12 of those and uh, you know, that’s, I don’t know, that’s, that’s a lot, that’s a lot to manage, uh, did have a great weekend here in Nashville, jumpstart Nova had both our founder summit as well as our LP meeting.

Marcus: And it was great. Um, but that’s just my excuse for why I don’t feel nearly as prepared for this episode. So I’m going to, uh, rely on you a lot, Vic. To kind of help, help, help me communicate effectively around the stories of the week.

Vic: I think we can do that. And I think you Off the cuff will be pretty good.

Marcus: All right. So with that, let’s

Vic: dig in

Marcus: treasuries. 27 trillion dollar treasury market is only getting bigger. Says the wall street journal. I had been [00:03:00] hearing about this story, largely positioned around the debt to GDP ratio, which I think in percentages is just shy of 130%. Um, debt, uh, versus GDP. And, uh, this treasury side of things just. More focuses on the issuance of treasuries, the market, the diverse makeup of that market, and how it’s just kind of generally making everyone feel a little on the uneasy.

Vic: Yeah, I mean, we keep waiting for the world to not want to buy our paper nervously, but, but so far that the treasury sales have gone very well, so it has not been an issue. I think the Wall Street Journal is pointing out just how. It has gotten even the interest is really significant and it it’s hard to see how it ever goes back.

Vic: Because politicians like to spend money

Marcus: for those listening, uh, on the, on the article that you can click on, [00:04:00] on in the show notes, there is a graph and that graph shows that from the year 2000, um, treasury issuance was less than 1 trillion. And, uh, throughout this, uh, this century, it has grown, uh, up to 7 trillion, but really 2020.

Marcus: Um, was a straight line up straight line up from, from around three plus trillion, uh, to 7 trillion, it came down and now it’s gone right back up. I asked Vic whether or not he thought it was, you know, build back better and, and, and other things like that. It does seem like. There’s some of that, um, infrastructure spending that, that drove us back up from, uh, a nice low mark below 4 trillion in and around 2022, uh, to where we are now in 2024.

Vic: Yeah, and these are quarterly numbers just for people, audience that maybe can’t see the chart. So we’re spending 7 trillion a quarter, [00:05:00] um, so something like 25 to 30, you know, it moves around. But. I think that I give the government a pass for the pandemic. I mean, I think it was, you know, it was a global crisis, healthcare crisis.

Vic: You got to figure out how to keep things going. But we’re back to that same level now, and there’s not a pandemic, right? So, right. I don’t know. I think it is, um, it’s worth looking at in the frame of kind of macroeconomic and, uh, interest rates and the economy, because this is, This is also going to be pushing inflation up, in my opinion, and it, it is going to be difficult for the Fed to get inflation down to 2 percent with all the government spending and debt issuance, uh, because that’s a, another, uh, inflationary factor.

Marcus: Yeah. Uh, going down further in the article, there is a chart that shows to your point about the quarter over quarter numbers that the U. S. Treasury debt outstanding right now is, [00:06:00] um, well north of 25 trillion. I think right now, if I had to Eyeball that I’d say that’s probably 26 plus trillion dollars, um, in outstanding treasury debt.

Marcus: And, uh, you know, I think that mounting pressure, we, we talk a lot about the, the challenges that, uh, our Senate and, and certainly our house has in, uh, agreeing on a, on a budget, but you have to think that this growing treasury debt that, by the way, I don’t think you can ascribe to any single, uh, administration.

Marcus: Uh, this is, this is over the course of Republicans,

Vic: Democrats, everyone has spent more than we have.

Marcus: That’s right. This is over the course of 25 years here. So, um, you know, it’s, it’s, it’s both sides of the aisle, but, but that mounting pressure that is coming from that escalating, you know, um, number. And it does look like the, the, the rate of change and the, The, the slope of the, of the growth is starting to go more and more vertical, um, it’s got to be creating a lot of pressure on those negotiations and those conversations, so.

Vic: Yeah, yeah, and I think [00:07:00] that that’s the fear is that, um, the slope of how fast the debt is increasing is ticking up, but it was pretty slow growth before the Great Financial Crisis. You had a marked increase in slope after that, and then again after the pandemic, it has not returned. And I’m fearful that that’s partly due to us paying interest on the debt, which of course is an exponential thing, the more debt we have, the more there is, but it’s also, I think, for the effect and for Congress and for everything, in order to make a difference, do a jobs bill, do an infrastructure bill, all of it.

Vic: You’d have to do bigger numbers.

Marcus: All right. Uh, next story from the government side of things. This is a good one. Uh, U. S. life expectancy back up rises after a two year dip. So, um, I think to some degree that dip was global. It was somewhat related to the pandemic. [00:08:00] And now, uh, we are, um, back up to north of 77 years, which is nice.

Vic: Yeah. Yeah, this is a good, good news story. Hopefully we’ll keep, um, with a slow trajectory up.

Marcus: Uh, all right. Moving into the next story. We’re moving into the discussions around venture capital in the healthcare space. And we continue to see more and more. Nice sized A and later rounds being done. Um, for a while there, they sort of all seem to be AI in nature.

Marcus: Uh, but this week seems to divert a little bit from that. So a company called Float gathered a 10 million for a series A in home care staffing. This is a story out of Axios.

Vic: Yeah. I was excited to see home health and home staffing have a company, you know, sort of jump into it. It’s a huge, I mean, as you know, you know, I haven’t lived as recently.

Vic: You have it. There’s a lot, we need a lot of new solutions there. And so, I think Float’s a marketplace to sort of try [00:09:00] to bring more workers to more homes and connect everyone together. Which is great and good to see a 10 million Series A deal get done.

Marcus: Yeah, look, this, this is a massive space, huge opportunity for, uh, the venture community to get involved and get engaged.

Marcus: Uh, just for background, there really have been two large home health companies. Not, we’re not talking about home care. Home care, you get into a lot more mom and pop. But if we’re talking about home health. Um, it, it’s LHC group and edis, LHC group was acquired by Optum last year. Um, edis right now has a deal on the table with Optum that’s going through the, you know, all, all the regulatory, you know Yeah, right.

Marcus: Rigor to, to, to see if it gets to the other side of it. But those, that’s it. There’s two big home health agencies. Um, yeah, there’s

Vic: another five or six regionals that don’t have nationwide scope. That’s right.

Marcus: And, and then when you get to home care. It’s, it’s, I don’t want to say it’s totally mom and pop, there are regional and even national [00:10:00] organizations, but they’re, they’re mostly, they’re kind of like franchises in terms of the way that they’re run, right?

Marcus: Um, not very tech forward. Uh, and, and the staffing is the hardest part. The staffing is the hardest part. And look, we, we’re, we’re running into a situation where the boomers continuing to age. Vic, as you, um, as you, as you said, I am currently living this right now. But, you know, don’t worry, everybody who’s in my cohort, Gen X, we’re all going to be dealing with this in a second, um, taking care of parents, okay, taking care of parents.

Marcus: And um, home care absolutely ends up becoming part of the mix of things you have to figure out when your parents sort of get to a place where their second childhood, childhood is upon them. And, um, you know, look, the, There’s not enough good staffing options out there. There really aren’t. So I’m excited about this, but I hope this is a competitive space because I think there can be a lot of winners in this market, a lot of winners in this market.

Marcus: All right. Uh, and [00:11:00] then there’s a, on the nutrition side, it’s hella nutrition startup nourish, uh, got 35 million in the series a. So that’s a large, large series. A

Vic: big series. A. And I was excited to see this. I did a show with Loren Driscoll, who’s the CEO of another competitor to Nourish. Uh, which is called Nourished, with an E D, R X.

Vic: Um, but it’s a, it’s a really exciting space. Nourish has contracts with all the big payers. Nourished R X also does. I think they’re two of, uh, maybe four pretty big players. But the whole food is medicine, getting, getting people the, the healthy food that they need to eat to really sort of, you know. fuel their body and be healthy.

Vic: People just haven’t had the knowledge, the education, the access, the understanding, and these companies and others are sort of bringing them, which is great.

Marcus: Well, we’re, we’re finally getting to a place where we’re recognizing that [00:12:00] a, the, the body has a tremendous ability to heal itself if it is properly, um, fueled.

Marcus: Um, and. It’s getting harder and harder to do that. I mean, I don’t want to go down a total rabbit hole, but there’s all sorts of studies, even about the quality of the soil that we have right now and how, and how it’s, it’s just a lower quality soil because it’s been, you know, farmed so many times or hit with so many chemicals, et cetera, et cetera.

Vic: Yeah.

Marcus: So. The overall baseline for everybody is down, right? Everybody pretty much needs supplements to actually get all your micronutrients that you need. Then you layer on top of that, living in a food desert or having some type of, uh, you know, uh, access issue, whether it be sort of a disability or a mobility issue or something like that, that doesn’t allow you to get to the right facility to get the high quality food that you need.

Marcus: And then you think about. You know, the impact that not having food has on medical adherence, and it’s just, it’s, it’s such a no [00:13:00] brainer, you know, it is such a no brainer to get people good food, you know, two, three times a day, get them good food, right?

Vic: Yeah, and it’s really, um, There’s a lot of cultural things kind of intertwined into food.

Vic: And so Lauren at Nourish Rx, which is a little bit different, but it’s the same space that Nourish is in, they spend a lot of time really kind of working around your family’s holidays and, okay, gosh, we always serve this on Easter weekend. Maybe we can do it with a little more health, health in mind and still make it, um, You know, still still have it be enjoyable and sort of fit with our culture so that that balance of bringing healthy food, but then also recognizing all the traditions is kind of part of it.

Marcus: Yeah, and look, I mean, I think it has to be said we’re about to talk about big pharma companies and some deals that are happening there, but. It seems like every week we’re seeing more and more series. A’s series B’s, uh, getting done big numbers, [00:14:00] 35 million. That’s a big number. Um, it kind of goes hand in hand with the all time highs in the stock market goes hand in hand with the all time highs in the crypto market goes hand in hand with the all time highs in the treasury market and

Vic: the IPO market markets

Marcus: opening again.

Marcus: That’s right. So we’re, we’re just, you know, look, I haven’t heard anyone on the, on the stock market side, officially call it bull market. You know, season, but it feels to me when you hit

Vic: all time, all time highs for weeks in a row, it’s something like a bull market, right? That’s right. That’s right. It

Marcus: feels to me like, like we are in full on risk on territory.

Marcus: So again, fun, fun time for us. Uh, okay. Merck, uh, 11. 5 billion bet on its big drug finally arrives. What’s, what’s this about Vic?

Vic: Yeah, so it’s a, it’s a new drug called, uh, Winn Revier, I’m probably not saying that correctly, but it’s a, um, drug for cardiovascular, it’s, uh, pulmonary atrial [00:15:00] hypertension, so, um, it’s the lungs and hypertension within the lungs, I think too much blood pressure in the lungs.

Vic: Oh, okay. I think that’s right.

Marcus: Okay. Yeah.

Vic: Um, and it’s, it’s a really effective drug, it’s also very expensive. And so it’s, it’s very effective and it costs 14, 000 per vial. Depending on your weight, you use different amounts, but it’s something around 240, 000 a year for the treatment. And so this is another in the category of it’s, it’s a really, Pricey drug.

Vic: I think it’s very effective, but but gosh, they seem kind of expensive.

Marcus: Yeah, I mean right here. It says that When Rivera, I’m just gonna say that’s how this house pronounced will list for a price of 14, 000 a vial which for about two thirds of patients will be the amount given every three weeks Which translates into about two hundred [00:16:00] and forty two thousand dollars for a full year.

Vic: Yeah Wow It’s a really good drug. It’s also really expensive. Good drug,

Marcus: man.

Vic: You

Marcus: know, gosh, it seems like a lot of these drugs are coming out of the gate. Pretty expensive, aren’t they?

Vic: Yeah. Yes. Well, and I think, uh, there’s beginning to be a, I’m going to call it a backlash. I don’t know if that’s the right way to say it, but Bernie Sanders Transcribed by https: otter.

Vic: ai Is like on the rampage now about how expensive the GLP 1s are versus the cost.

Marcus: Yeah.

Vic: And, okay, I mean, yes, it costs four or five dollars to make a Zimpic, but that is not the same as what it should be. Should be the list price. I could just hear him say it. Yes. We should have got a clip for it, but These drugs should not pay this much money.

Vic: Right. So, I don’t know. I mean, [00:17:00] it’s gonna Congress now has some tools to start pushing back. And it’s a, you know, a pretty good soundbite. Because it does seem Does seem really expensive.

Marcus: I mean, I, I, I think we’re just hearing, and again, you and I, we we’re, we’re wonks we’re in this space. Yeah. Right. We’re reading this stuff every day.

Marcus: But if you’re even remotely paying attention to what’s happening in the, the pharma world, a we, we, we definitely have a, a new wave. Of amazing drugs that are, you know, treating things in a way and that we previously just didn’t think they could be treated. Right. So that’s, that’s unbelievable. But the price tags kind of of all these things are really kind of hard to wrap your head around.

Marcus: You know what I mean? I mean, 242, 000 a year, like that’s a massive salary for a person, right? So you try to wrap your head around. Okay. How can an employer make sense [00:18:00] of that? How many people actually need this? How big is the, you know, how big is the patient market opportunity here? And who can really afford to pay 250, 000 a year to get this treatment?

Marcus: So it’s just Well, we’re all paying for it. I mean,

Vic: there’s not many people that are on this costly drug that aren’t in, in Medicaid or Medicare. I mean, like, I don’t care how much you make, if you pay that much money out, you quickly shift over. Um, so I, I think we all pay it in our, in our taxes.

Marcus: Well, do we pay in our taxes or do we issue more treasuries?

Vic: CMS. Yeah. Either way, either way.

Marcus: Yeah. Cause I don’t feel like my taxes are going up enough to kind of cover all these new drugs. Right. So, um, Anyway, congratulations to Merck and, uh, you know, best of luck on the sales of that drug. Johnson Johnson continues to move more and more into being, uh, [00:19:00] squarely a, uh, a healthcare business and away from sort of their consumer, um, brand roots.

Marcus: And they are currently discussing a deal for Shockwave Medical, which is a 12 billion, well, it was 11 billion market cap company. Prior to the announcement of the deal consideration, that bumped up Shockwave Medical’s market cap to 12 billion. And, uh, yeah, I mean, Johnson Johnson is out doing deals, and big ones.

Vic: Yeah, yeah, that’s right. This is a cardiac device. J J’s already pretty good in, in cardiac. It’s strengthening them. Uh, I, I like the last paragraph though. So they’re talking about the deal. It’s, it’s a good deal all round, I think. Um,

Marcus: oh yeah. Oh yeah,

Vic: yeah. But then, uh, but they sort of, the wall, it’s in the Wall Street Journal, I think it’s, yeah.

Vic: And they, uh, they go into, uh, sort of overall market sentiment. And I just think it’s worth reading deal making has picked up in the U. S. after a low in 23. U. S. transaction [00:20:00] volumes are up 51 percent to about 407 billion compared with a year earlier. More than 80 billion of those years are in health care.

Vic: So the overall market’s picking up and a significant, you know, 20 percent is in health care. Yeah, health care. Which is how it should be. I mean, that’s 20 percent of the economy.

Marcus: Alright, what else we got here in the M& A space? Uh, Biotech. Let’s see here, uh, Venture Back Cardior, and Why are all these, like, biotech names so damn hard?

Marcus: God bless, man. Is that it? I mean, I don’t know. Cardioid AMAL. Congratulations guys. Uh, anyway, uh, uh, more and more, um, uh, deal interest here. It looks like a Nova Nordisk is interested here. That’s a 1. 1 billion deal that they’re discussing. Um,

Vic: this, this is in cause they’re venture backed deals. Yeah. So, I mean, They’re small compared to the last deals we just talked about, but it’s billion dollars.

Vic: So, and [00:21:00] it’s

Marcus: biotech, which has been like dead for 18 months.

Vic: Yeah. So overall, I think that over the general market is, you know, risk on everywhere.

Marcus: All right. Uh, Amazon expands same day pharmacy delivery to New York and Los Angeles. I can’t believe they did that. Didn’t already have same day pharmacy in New York that that

Vic: they’re really does mean they bought a pill pack Yeah, which really isn’t how many years ago?

Vic: Yeah, it’s a long time eight years ago. Yeah, it’s a long time Yeah, but but they’re designed for a chronic minute. I mean the most the most lucrative prescription delivery space is the the ongoing maintenance medications that I get Whatever, I’m on a stat, and I get every 90 days I get a new stat, but it doesn’t need, it’s not that timely.

Vic: Like, you can send it to me a week early, um, and you [00:22:00] only have to send it every couple of months. The same day is hard logistically, so they’ve avoided that, um, but now they’re opening it up. And I, I think it is sort of indicative of what we’ve talked about with Amazon before. They keep attacking a piece of healthcare, they learn some, then they drop back and they take another run at it.

Vic: But every time they’re sort of building more and more capacity. And they’re not going to stop. They’re going to keep, keep working on stuff.

Marcus: Well, I mean, I guess, I guess the surprising thing for me here is just that when I think about getting my prescriptions filled, I think about it as a same day activity.

Marcus: Right? Generally speaking, unless I go to urgent care late in the evening. Yeah. If I go to the doctor and is in the morning or or even early afternoon, I expect that by the end of the day now, it’s not delivered to me, but that by the end of the day, I will go to Walgreens and I will pick up my prescription.

Marcus: Right? So it just is a little surprising to me with the infrastructure that Amazon [00:23:00] has and given the number of things you can already buy on Amazon that will be delivered same day. That this is just now being rolled out same day now. I’m not saying that it’s not a different logistical, you know challenge But just kind of surprising to me.

Marcus: Yeah.

Vic: Well, i’m chairman of a prescription delivery company as you know, we we offer Same day next day and today.

Marcus: Yeah

Vic: And there are some drugs that you, you want to get to the patient same day, but there’s others that next day is fine. Two days is fine. Amazon not offering it. I think it was just a matter of them not focusing on it because PillPack was not designed for that in the beginning.

Marcus: Yeah. Okay. That, that, that makes sense to me. And do you think like in terms of New York and Los Angeles, are those big one medical cities? Like. Do you think there’s something about them having deep integrations there with the EMRs and feeling like they can sort of track the whole process more, more closely or?

Vic: That wasn’t what I took away from it. I [00:24:00] think they just are opening up two huge cities and gonna roll it out. You know, they say these other cities, they’re basically going to the top 20 U. S. cities in the next couple of years. They just started with New York and LA. I think because those are. you know, two marquee cities.

Vic: Yeah. Okay. Got it.

Marcus: All right. Continuing on occupational care provider, concentra files for IPO more good news on the IPO market side of things. Um, this is a select medical holdings company that previously was co owned with Welsh Carson select purchase them out. Um, a hundred percent owned and I guess they filed on Monday for their IPO.

Vic: Yeah, that’s right. So, um, you know, with Reddit getting out and being a huge success last week, I think we’re going to see several of these, but it’s good. It’s good to see a healthcare one.

Marcus: Yeah, and what’s the details of Concentra? They’re occupational medicine. Right.

Vic: Um, I don’t know the revenue. I was looking for the revenue earlier.

Vic: I couldn’t find it. But, um, [00:25:00] they are a decent size. They’re in like 20. 20 states or so.

Marcus: Hmm. Okay. Well, let’s track this one. Because, uh, I mean, I think this is the first healthcare IPO of the year, is that right? It’s the,

Vic: yeah, it’s the first one of any size. First one I’ve seen, so I think it’s the first one.

Marcus: Yeah. Yeah, we

Vic: can pull the S1 and learn more. I don’t think it’s going to actually price for a while.

Marcus: Okay. All right. And then one more story before we, we kind of get into what I think are sort of the two big, uh, areas for the show, which one, um, the story about, uh, UHG and steward, um, which I think is just representative of so many things that are going on in healthcare today.

Marcus: Uh, and then we’ve got our AI rundown. Um, But this story, uh, which is talking about hospitals adding billions in facility fees for routine care, which, you know, sounds a lot like, uh, hotels adding facility fees, you know, for your, for your vacations. Um, I’ve actually, I’ve actually [00:26:00] seen these, these facility fees, uh, in, in bills recently.

Marcus: Um, I’ve seen them. Yeah. And Because we weren’t paying for them, you know, like, like, like it just kind of goes the insurance insurance ends up covering it. And so it’s fine. But yeah, these facility fees, uh, this is. I don’t exactly know what the loophole is in the, in the law that allows for these to be added onto the bill.

Marcus: Um, but I love that there’s a, there’s a full story that’s, that’s kind of covering it.

Vic: Yeah. I don’t know how it works with the network contracts. Is that what you mean? Like how, how do they pay? Why do the payers? Well,

Marcus: in my case, I mean, Medicare was, was the primary, so I don’t even know if that’s a network contract thing as much as it’s,

Vic: yeah, but that’s still

Marcus: the same and they, I mean, sort of, but, but if, if Medicare is covering it, that means it’s, it’s like it’s, it’s, it’s, it’s allowable by definition.

Marcus: Yeah, it’s, it’s, it’s clearly a [00:27:00] fundamental part of how the healthcare industry works. So it’s just a matter of like educating the public about how this whole facility fee thing, you know, makes sense. Like how does, how does this actually make sense? Yeah,

Vic: I don’t. I mean, I think you and I are fairly well informed.

Vic: I’ve read the story. I still don’t know how it makes sense other than to get hospitals more money.

Marcus: So, so it’s right here. Um, just sort of picking a random paragraph in this story. So the hospitals say facility fees helps offset the extra costs that they incur to meet, uh, federal regulations, uh, in quote, it’s not as simple as same services across the board, said Jason Kleinman, director of federal federal relations for the American Hospital Association.

Marcus: So, I mean, I, I get that. I get that at any given point in time, the government will roll out a set of regulatory, you know, requirements that increases cost. I love the idea that the, that the hospitals charge that back to the [00:28:00] government. in the form of these facility fees. Um, I wish we could do that for, you know, to the SEC or whoever, you know what I mean?

Marcus: Like when, when they, they roll out some, some extra, uh, you know, requirements that cost us more money when legal fees and consultants, et cetera. Yeah. I don’t want to be too mad about it. Cause I feel like hospitals are generally speaking in America, getting a pretty raw deal right now. Um, as I think the next story will, will illustrate.

Marcus: So I’m, I mean, I don’t bitch about it a lot. I

Vic: think, uh, well run hospitals that have strong Networking. Hold on. Hold on. Well run hospitals that have strong Strong network power, like HCA is doing very well. And Payermix. Yeah, Payermix. Network power and Payermix, I think, are similar. But not the same. Not the same.

Vic: Not the same. They are doing pretty well right now, I think. Yeah. Hospitals that don’t have that are not doing well. And which is a lot of those. I was about to say,

Marcus: which are the majority?

Vic: Yeah, of the 5, 000, there’s probably 4, 000 that are not that [00:29:00] strong. Right. But I think that patients, part of this story is saying that, you know, patients have a total share in the out of pocket costs.

Vic: They end up paying for a percentage of this. CMS is not paying for all of it. And so it’s, I think it’s challenging for a patient just to get another, another bill.

Marcus: So, so right here, there’s a chart in this story that shows like what Medicare paid for cardiac tests. And it’s sort of showing how the numbers have diverged over the course of the years.

Marcus: But right now, Um, on average, hospital owned facilities, the, the charges for cardiac tests are more than double what they would be if you had that same test done in a doctor’s office. And so it’s clearly just covering overhead costs, right? For, for a large building facility, you know, like, like, like the building has to be kept

Vic: up.

Vic: I guess so, or they can just go do the damn service at the doctor’s [00:30:00] office. Yeah, but why do we need a hospital then? We don’t need a hospital. We don’t need as much hospital facilities as we have.

Marcus: I, I, I don’t disagree with that. I don’t disagree with the idea that we have overbuilt hospitals when we could be doing things in sites of care that are much more efficient, lower cost, and potentially higher quality as well.

Vic: If I get a diagnostic image and it’s in a freestanding center versus an acute care center, your, the insurance bill was, no, my portion of that’s not the same, but the full bill is going to be probably a third. If you go to the freestanding facility.

Marcus: When was the last time you got a cardiac test in a hospital that did not come attached to an ER visit?

Marcus: Like, I feel like every time I do something diagnostic, it’s not in an actual hospital. It’s in some [00:31:00] freestanding location. Yeah,

Vic: right. I never go to I mean, not even due to the money, I don’t want to deal with the hassle of going in, parking, and Unless you have to go to the

Marcus: ER for some reason.

Vic: Yeah.

Marcus: Right?

Marcus: Right. And then, then, you know, like I think about the last time I went to the ER, One of the things they do is upon intake, they hook you up to the EKG, and they like check all that stuff out. So right there, there’s your first test. Yes, right. Like, before you even get to your room, they hook you up to the EKG, right?

Marcus: So, I mean, I guess I’m just saying that it’s kind of a different thing. I feel like, generally speaking, your PCP will route you to a low cost site of care, and also just a friendlier place for you to be, as opposed to, like, going in a hospital where people are dealing with really serious things. Um, so it’s It’s not quite the same equivalent thing, right?

Vic: I mean, but you still need to have those tests. I think it should be the same. Why is it? Why is the EKG more expensive in the ED versus somewhere else? Because the facility costs more to keep up. [00:32:00] There’s nothing to do with it.

Marcus: Listen, I, I’m, I’m simply saying that the operating overhead of the facility, meaning the hospital, is more.

Marcus: I mean, I can’t imagine what the P& Ls would look like. Like, now that we have this story that’s really sort of talking about how, how big these facility fees are, can you imagine if they were stripped out? Like how much worse these hospitals would be doing?

Vic: Yes, they would have to then charge for what they actually do that no one else can do.

Vic: Okay, which is? Which is the emergency room, which is the Observation. Observation, ICU, ICU. All things inpatient.

Marcus: Yeah, all the impatient. All things impatient. That would be much more expensive. Yeah, but I’m saying you get, but, but it is more expensive. That, that’s sort of the point. The same test in an impatient setting is twice as much.

Vic: Yes. I, I

Marcus: think that’s, that’s kind of the point. And so, because the overall [00:33:00] facility is way more expensive to, to keep up than one of these freestanding facilities. Right? I mean.

Vic: That’s the justification for it. I don’t know that that makes sense from a policy point of view, but that’s the justification for it.

Marcus: But, but do, but do we want hospitals in communities, right? Do, do we? No.

Vic: I don’t think we, we don’t need as many as we have. That’s what I would say. We need them in Nashville, but do we need 80 to 100 hospitals across Tennessee?

Marcus: I don’t think so. I can’t speak for those other communities because I don’t live there.

Marcus: I can say in Nashville, I feel like we’ve, we’ve got about We have

Vic: great hospitals in Nashville. Yeah. And I’m happy that I live here, that we have great hospitals.

Marcus: Yeah. And I think we, we need what we have is, is, is kind of my current sense. Um, I, I haven’t seen any like, uh, sort of bed availability metrics on, on, uh, [00:34:00] Nashville’s hospitals lately.

Marcus: That, that might be like a fun thing to, to dig into is just kind of see, cause we don’t, we don’t have like a whole lot of new hospitals being built here. Most of the new buildings, like, like the other day I took my dad to, um, a new neurology. We can’t build a new hospital, can we? Uh,

Vic: can’t. Never need.

Marcus: Yeah, but we’re growing as a population.

Marcus: I mean, significantly, so.

Vic: We could go argue for

Marcus: getting

Vic: COA. Yeah, right, right, right, yeah,

Marcus: just based on population growth. Um, but I guess my point is, most of the things that, for example, in the VUMC, you know, Vanderbilt, um, medical center, um, system, and there’s, there is a lot of building happening in that system, but it’s mostly specialists, primary care, urgent care, right?

Marcus: It’s not hospitals. There’s not like a whole new hospital being built. The clinic for, for neurology was beautiful, brand new specialist clinic, and it’s on the campus.

Vic: And Vanderbilt, I think has, they don’t have a lot of empty beds. They’re typically. [00:35:00] When I’m talking about trying to sell them innovation stuff, they’re typically trying to get people out because they need more capacity.

Marcus: Right, they need more capacity. Yeah. Yeah, so I guess that’s kind of my point, is in a place like Nashville, we probably have the number of beds that we need.

Vic: Yeah, Nashville’s not, Nashville’s not my concern, it’s, it’s the middle, it’s the middle, it’s the middle, it’s the middle, uh, kind of size cities. So anyway,

Marcus: yes, we’re gonna,

Vic: we’re gonna, that’s a good segue.

Marcus: Good segue, take a break, let Doug talk about Jumpstart Foundry. And then we’ll come back and we’ll talk about this, uh, the Stewart health story.

Doug Edwards: Thanks guys for the opportunity to talk about our pre seed fund. Jumpstart Foundry. My name is Doug Edwards, CEO of Jumpstart Health Investors, the parent company of Jumpstart Foundry.

Doug Edwards: We’re so excited to be able to talk about, uh, early stage venture investing, certainly the need for us to change the crazy world of healthcare in the United States. We are spending 20 percent of our GDP north of [00:36:00] 4 healthcare with suboptimal outcomes. Jumpstart Foundry exists to help us find and identify and invest in innovative companies that are going to make a difference in health care in our country.

Doug Edwards: Every year, Jumpstart Foundry invests a fund, raises a fund, and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners. To invest, to help us make something better in healthcare. Some of the benefits of Jumpstart Foundry is there’s no management fees. We deploy all the capital that’s raised every year in the fund.

Doug Edwards: We find the best and brightest typically around single digit percentage of companies that apply for funding from Jumpstart and we invest in the most incredible, robust, innovative solutions and founders in the United States. Over the last nine years, Jumpstart Foundry has invested in nearly 200 early stage, pre stage companies in the country.

Doug Edwards: Through those most innovative solutions that Jumpstart Foundry invests in, we also provide great [00:37:00] returns and a great experience for our limited partners. We partner with AngelList to administer the fund, making that ease of access, not only with low minimums, but the ease of investing in venture much better.

Doug Edwards: We all know that healthcare is broken. Everyone deserves better. Come alongside us with Jumpstart Foundry, invest in making the future of healthcare better and make something better in healthcare. Thank you guys. Now back to the show.

Marcus: All right. So I, I almost could not believe I saw this story this week, but when I read it, I was like, this is the perfect story to describe the situation we find ourselves in, in American healthcare today.

Marcus: Um,

Vic: Yeah, it illustrates a lot of important points going on.

Marcus: Yes. So, um, America’s biggest, you know, most powerful healthcare companies, UnitedHealth Group, they have made [00:38:00] an offer to buy the Steward Health Physician Group. So listeners may remember probably four or five weeks back when we were talking about, um, the Steward Hospital.

Marcus: Steward is a physician owned health system. Um, That has sort of gone in and out of trouble with, with reeds and all sorts of stuff. But right now in Massachusetts, um, in probably three different towns right now. Yeah. And they

Vic: have other issues in other parts of the country too.

Marcus: Yeah. But the Massachusetts story was a big one.

Marcus: Yes. Um, it’s like any, it was like any day now the whole thing could shut down. Right. The whole hospital shut down. There was no, no clear path on how it was going to be able to continue.

Vic: Yeah. They’re in, they’re in the fall. So then they’re on their real estate leases and a bunch of other debt. Yep. And they have a incestuous relationship with their REIT, which is a whole another discussion, the whole lease buyback [00:39:00] disaster thing.

Marcus: So, so obviously they need to come up with some money. The government is not, is not bailing them out. Right. Not the federal government. Right. And apparently, not the government of, of the state of Massachusetts. Neither is going to bail out this, this entity, right? Well, I, I don’t know if

Vic: that’s true. But, but there’s

Marcus: Have

Vic: you heard, have you heard that it’s happening?

Vic: And there’s no pool of money. I don’t know

Marcus: where that would

Vic: come

Marcus: from.

Vic: Well, they issue new debt all the time.

Marcus: Fine one. Well, the feds are not going to do that. So it would have to be something that would happen at the state level. And I don’t know. Probably unlikely. Yeah. Right. Probably, probably would be very unpopular.

Marcus: And, and pretty unlikely. So, um, Optum is making an offer to buy not the hospital, but the physician group. Optum has for many years now been acquiring physician groups. Um, I think they are already the largest employer.

Vic: Yeah, they [00:40:00] are. They’re a large employer of doctors already. Of doctors. Yeah. Before

Marcus: this deal.

Marcus: Before this deal. This would just absolutely cement that. Yeah. Reality. So. Obviously, there’s all sorts of critical issues around MNA happening at the state and federal government level. There’s a lot of eyes on UnitedHealth Group right now. And yet, and yet, there’s no real good answer for Stuart. There’s no good answer for Stuart today, right?

Marcus: There’s no good answer for that, for those communities. There’s no good answer for how this hospital is going to pull itself out of. Bankruptcy, insolvency, and so, and there’s a bunch of physicians here who would like to probably work for a stable company. And so at the surface, you could see how [00:41:00] this kind of headline would cause a whole lot of people to have a lot to say.

Marcus: But at the end of the day, who’s going to do something? Who’s going to do something? Optum is stepping up and they’re going to write a check and they’re going to keep these physicians employed, which is going to keep those physicians working with, you would think, their panel of patients, right? And To your point, to your point, and to your point, well, hold on, you just said, you just said we don’t need any more hospitals.

Marcus: Yeah, we gotta shut it down. You just said we don’t need these hospitals. Yes. Right? So, hospital goes bye bye. Right? Optum probably works into some, you know, urgent care set up with some specialty things that they wire up. Yeah. I mean. They’ll go

Vic: practice at another hospital. Who

Marcus: could do that better than them?

Vic: Yeah.

Marcus: Right? Get that all rewired. And isn’t this just where we’re headed, right? Now, [00:42:00] the regulators, I mean, you could just see the steam coming out of Bernie Sanders ears when he saw this headline, right? Of course. I mean, you can see it. It’s, it’s, it’s. And all the

Vic: Democrats, you know, in

Marcus: the, in the

Vic: Massachusetts

Marcus: State House.

Marcus: That’s right. That’s right. Yeah. I mean, it’s, it’s in there. It’s in his neck of the woods. It’s not quite in Vermont, but I mean, it’s up there in the New England area, right? Yeah. Um, so you can see all the, all the dems, the steam coming out of their ears and everything like that. But who’s got a better answer, right?

Marcus: And this is just going to happen over and over and over and over again. And, and look, when we’re talking about the payvider platforms, I don’t think Cigna is a buyer of Steward’s Physician Group, right?

Vic: No, they’re definitely

Marcus: not. They’re not a buyer. So, it’s Optum, it’s Elevance, Carillon, Humana,

Marcus: who else? What about Partners? Partners.

Vic: I [00:43:00] mean, they’re the natural, they employ a ton of docs that they’d be, but they’re not, um, in the competitive landscape. That’s

Marcus: what I’m talking about. I mean, I mean, who, who, who can just kind of do deals? I don’t know. The partners can, can do deals like the aforementioned three,

Vic: but I mean, health systems are the ones that traditionally employ docs now United and Optum have changed that.

Vic: That’s over. That’s over. Okay. Well, it. You mean the entire health system business

Marcus: is over? Well, no, no, no. I mean, as, as you said, the network power, so for profits, great, great markets, great network power. That’s, that’s, that’s one thing.

Vic: Not in Massachusetts. That’s right. That’s

Marcus: HCA and that’s Tenet. Ain’t no,

Vic: ain’t no for profits in Massachusetts.

Vic: That’s HCA and Tenet. Yeah. Okay.

Marcus: And, and I’m sure there are others, but like, let’s just put HCA and Tenet in a, in a category of like, [00:44:00] Really, really high functioning, for profit, great market organizations. Okay. Then next step, you got the massive nonprofit platforms. Common Spirit, Advocate, are kind of the top two.

Marcus: Trinity, really big, right? So, you know, Ascension. Yeah. Um, you know, those are pretty much the big four, aren’t they, right now?

Vic: Yeah,

Marcus: that’s right. Right? Common Spirit, Trinity, Ascension, and uh, Advocate. Advocate’s number three in the whole country at this point. Yeah. Um, so, so you got those four. And, and those, those, they have so much scale.

Marcus: That they can figure it out and they can make acquisitions. But I would say, you know, advocate probably performing really, really well. Ascension turning things around, looking good, but turning things around common spirit, turning things around. So probably not in a real aggressive posture, you know, they’re still trying to work on getting the bottom line to be healthy.

Marcus: Right. I think Trinity Trinity is actually performing pretty well. Yeah, I’ve heard, but I don’t think

Vic: any of them like. This geography.

Marcus: No. [00:45:00] So So there’s no one left. That’s right. So Optum steps up and Optum makes the purchase, right? Yeah. Like I don’t begrudge Optum. Well, I guess this is my point. Like, everyone is going to be up in arms about, Ah, M& A, this is terrible.

Marcus: You know, we got to kind of Okay, but who’s going to do anything about it? No one’s going to do anything about it. We, we have worked ourselves into a situation where America’s foundation for hospitals is just simply not solid. If you are not of significant scale or have a great payer mix, your business model does not work.

Marcus: That’s true, but that’s

Vic: not the problem with Stewart. No,

Marcus: no. They are bad actors. Hold on, hold on, hold on. They’re bad actors. Hold on, hold on. It is the problem with Stuart. Now there are, yeah, there are additional problems with Stuart, [00:46:00] but that is the problem with Stuart. Well, like, like that’s, that’s a problem with all these hospitals.

Marcus: And of course the more poorly run of them are going to get,

Vic: you know, poorly run though is different than selling assets and then paying yourself big bonuses and doing that until you can’t do that anymore. And then just. Walking away and joining Optum. That’s a bad actor. That’s not, that’s not incompetent.

Vic: That is, take, I mean, over four years they sold all the good assets and now there’s no more shit to sell so they’re just burning it down.

Marcus: Well, okay, also more the story of healthcare in America right now. Yeah. I don’t think Stewart’s gonna be the last of those, of those kind. That’s right. And so the no, no, no more private equity to bail you out because I don’t think these private equity firms want to be under the FTC’s [00:47:00] eye of Sauron, right?

Marcus: They’ve already

Vic: squeezed all the juice out of it. Cerberus owned it before the, the doctor group. I think private equity will be involved, but not in assets that they’ve already bought and taken all the value out of, and then sold to, I mean, this class

Marcus: is not really that attractive anymore for them. Yes.

Marcus: This, that day is kind of over. I

Vic: mean, I, I think. Again, it depends on the markets. This particular market, I agree with. It’s a problem. And there’s going to be no hospital in this area. They’re going to have to drive an hour up to It’s

Marcus: It’s a problem, but it’s a, it’s a, it’s a narrative problem and the narrative is very, um, is very detached from the economic reality, right?

Marcus: The narrative talks about, uh, consumer choice. Running up prices, [00:48:00] uh, you know, oligopolies, like, you know, that’s the narrative. The narrative doesn’t talk about the fact that these institutions cannot sustain. Yes. They cannot run a profitable P& L. And nobody is coming to save them. That’s right. So they’re gonna get bought.

Marcus: I’m sorry. They’re either gonna get bought or

Vic: they’re gonna just go to shut down or they’re gonna shut down These these hospitals should be shut down. I think

Marcus: I mean we don’t have the story up But but story came out today or yesterday like there’s a whole suit going on in North Carolina right now around Novant Health Yeah, and they’re way smaller than advocate.

Marcus: Okay, but they’re trying to like way better than Stewart Yeah. And they’re trying to merge and they’re getting, you know, punched in the eye because, oh, you know, this is going to create a two system market and can’t have that and all this other kind of stuff. And I’m just like, what do you have? You looked at the business

Vic: model, the regulation is being done out of a place.

Vic: It does not understand [00:49:00] the realities. These hospitals are facing like that. If Navant can’t, well, the politics don’t, don’t care about that. Right. The politics don’t care about that, but then the politicians are going to be all mad when this hospital, Stuart Hospital, just bolts the door and walks away.

Vic: That’s also going to be a problem. I guess they’ll just go on and do another political campaign and find a new narrative. Like no one really, there’s so many. I mean, healthcare is

Marcus: so complicated that, that you just need simple narratives. Right. Yeah. Bad guys, mergers and acquisitions. Those are pretty simple narratives.

Marcus: Driving up price, less customer, uh, uh, options, less customer choice, monopolies, oligopolies, like that’s, those are really nice, simple narratives. They, they totally leave out the fact that the government’s business model. is fundamentally broken for health care, and only the mega, you know, and oh, by the way, [00:50:00] we’re only going to be layering on more regulation as we will talk about later in the show.

Marcus: Yeah, we’re only gonna be laying on more and more and more regulation, which only is going to increase the cost of doing business.

Vic: Yeah. And the, the Health systems that can least afford it are going to still have to do it. Yeah. And so they’re going to sell. Yeah. So they’re going to sell or go out of business.

Vic: They can’t sell to anyone who the FTC would allow to buy them.

Marcus: Time for an AI rundown. This, this AI, uh, race is really starting to heat up between, uh, the magnificent seven. I mean, um, it’s last week. It’s really shifting in the last two weeks. It has, it has. Well, last week we talked about Microsoft. Yeah.

Vic: Microsoft. Microsoft was the big player last week. Yeah. That’s right. They were the big player last week. Um, this week, basically Aqua hired. An entire A. I. Company called perplexity for a lot of money.

Marcus: Yeah. Um, and then we, we talked about, um, [00:51:00] we talked about Claude having a new release, uh, Claude is from a company called Anthropic, uh, and Amazon just invested 2.

Marcus: 75 billion into Anthropic. Um, and I think that, Amazon has been invested. It’s not the first investment they’ve made in Anthropic, right? Um, but this is a big one and I think we’re starting to now see like Amazon is chips in on Anthropic and Claude. Claude is very performant. It’s it’s very competitive against uh, Gemini and um, and uh, GPT.

Marcus: And it

Vic: has, 0. 5. They fight with Gemini, but they, what I like about Claude is the context window. Yeah, you can, you can put, just for the listener, you can put a lot of information into the AI, like three or four hundred pages of information, which I haven’t used yet, but, but I have put like 30 pages of information in and not [00:52:00] surprisingly, Claude then is much better at giving me in context answers because, because I’ve provided all that.

Vic: So they sort of led that and Google has sort of caught up quickly, but, uh, but that’s what they’re really good at. So.

Marcus: Today I noticed on LinkedIn, did you see the AI beta rollout on LinkedIn?

Vic: No, I haven’t seen this.

Marcus: Okay. So I might’ve opted in a while back and now it’s just like appearing, but now in the feed below the post on every single post, there’s like a couple of different buttons that are there.

Marcus: Uh, let me see if I can load this up really quick. Cause cause I haven’t seen it. Yeah. It’s, it’s, it’s relevant to. Okay. Perfect. Okay. So here, here’s a post, uh, Keanu Patterson and you know, she’s talking, she’s got pictures here and it says a wonderful evening of great vision and determination with the incomparable blah, blah, blah CEO.

Marcus: Yeah. But then there’s a button here. It says takeaways. See that?

Vic: Yeah, so [00:53:00] you don’t have to read it, you can just hit takeaways and Copilot will do it for you.

Marcus: Yes. Yes. So the reason why I’m bringing this up, right, so just for the listeners who are not watching, there are, there are multiple parts to this.

Marcus: Kind of prompts for you that there, that are AI prompts that you just have to click, you don’t, you don’t type anything in. One is take takeaways. Another one is what is, what is the significance of investing in women? What are the economic benefits of investing in women? These are all related to the post.

Marcus: So the post has already been run through, um, yeah, it’s already been run through a prompt to spit out prompts

Vic: for you, it’s Microsoft, right? Yeah. So it’s, it’s, it’s, it’s been, it’s been processed, right?

Marcus: Right. Um, and then you click one of these and then you start to get an AI breakdown, like right there from one click.

Vic: Yeah, it’s great for engagement. I mean, it’s going to pull people into much more engagement.

Marcus: Yes, so the reason why I brought it up is because, yes, LinkedIn is owned by Microsoft. And so Microsoft has now got LinkedIn in a place [00:54:00] where Every post has already been run through their

Vic: AI engines. Yeah, they are training, of course, they’re training their, their stuff on LinkedIn.

Vic: Of course. But now they’re being very open about it and what’s more open, like unveiling it to drive engagement.

Marcus: Yes. So. When you think about Amazon and you think about large context windows, right? Think about all of the product information that Amazon has. Think about all of the books that Amazon has indexed, right?

Marcus: I don’t know,

Vic: do they have IP rights to that?

Marcus: Uh, I mean, I gotta look at that, I don’t know. They probably have certain rights. They don’t have

Vic: commercialization rights to it. Like, your book can be bought on Amazon, but they don’t have rights to the intellectual property of your book.

Marcus: No, but, They probably have rights to leverage, they probably have the right, well, whenever you buy a book on Amazon, well, if you [00:55:00] go to a product page for a book, you know, there’s always like a, you get to like read like three or four pages.

Marcus: Yeah, they have

Vic: that. Yeah, okay. And then all the features, whatever, whatever the person selling the book or the item has provided, they have. Right.

Marcus: So I guess my point is they probably have the right to use. Your intellectual property in the pursuit of selling your book. And so maybe they custom create some, uh, AI prompts that they believe will increase the likelihood of conversion, right?

Marcus: Answering certain questions about the book that maybe the current product page does not accurately. Right. Um, answer. So you, like, you can see where them integrating Claude with a large context window across all of Amazon. And then start to think about that in the context of health. Right? Yeah. , every, everything Amazon is [00:56:00] now starting to collect on us from a health perspective, whether it be one medical, whether it be the pharmacy.

Marcus: Um, whether it be our purchases that are health related, but they’re more on the consumer health and wellness side of things and now having an AI engine underneath all of that activity. But the reason why I wanted to bring up the LinkedIn thing here is I think this is a this to me was like another level because the post has already been run through the AI already.

Marcus: So like all of the content on LinkedIn. It’s been run through AI. They,

Vic: it’s not

Marcus: one post as you can see,

Vic: it’s every single post. Yeah. And then the, what I’m trying to explain that I can’t really get out is that they’re doing this for your posts, but also my posts and every listener’s posts, the entire LinkedIn ecosystem.

Vic: Yes. So someone at Microsoft can see all of those trending [00:57:00] topics and ask, co pilot about whatever they want to ask it about. Um, And they always could sort of surf through LinkedIn, but it was pretty hard and chaotic to get anything out of it.

Marcus: Listen, to me, that’s, that is a big deal. It’s a big deal that every single post is being run through a preliminary AI filter to generate prompt buttons for you that are directly related to the post.

Marcus: Right. That then you will click and will give you a full, uh, Yeah.

Vic: So, so let’s talk about the AI landscape because I think it’s shifting daily, right? So stability is dead. Okay. Well, sorry. Let’s, let’s go to go to that story. Yeah.

Marcus: Yeah. So, so, so stability was kind of the beginning of all things image generation, right?

Vic: They had the first one. Yeah.

Marcus: Yeah. Um, and, and, and this, and, [00:58:00] and when that started, this guy, um, a Ahad, Maik, that guy, uh, yeah. Ahad, Moske, I dunno how to say it. Yeah. Yeah. I, I, i, I gotta do better at that. Um, anyway, who, who was their, their founder and CEO? Yeah. He has left the company. There was a big fight. He left the company.

Marcus: How, how I found out about it was on Forecaster. I know,

Vic: I know. .

Marcus: Uh, so I don’t expect any of our listeners to know what the hell forecaster is, but Forecaster is a, yeah. Uh, sufficiently decentralized social network that, um, basically is where you’ll find everyone who’s into like Ethereum and uh, and Solana.

Marcus: Web3 stuff.

Vic: Yeah.

Marcus: Yeah. It’s where everybody there is. It’s like

Vic: Twitter if you owned all your tweets personally. Yes. And you could take all your stuff and move somewhere else if you wanted to. That’s right.

Marcus: And there’s less than a million tweets. active accounts on there right now. So it’s, so it’s high, high, high, high signal, low noise.

Marcus: Yeah. On [00:59:00] that

Vic: platform. Bleeding edge, like new stuff. Yes. And really cool.

Marcus: Yeah. But real people, I mean, like Mark Andreessen is on there and like, uh, I mean, it’s, it’s, it’s like legitimate. Um, anyway, I, I’m in the AI channel. I’m, I’m, I’m a follower of the AI channel. And so one, like one day I opened up Forecaster and I see this post from Friday, Thursday or Friday, it wasn’t that long ago, that says, uh, you know, I’m all in on decentralized AI.

Marcus: Right. And he’s leaving stability. And so he announces to the destab to the decentralized world, right? Everybody on Forkaster who’s all about this decentralized stuff, that he’s leaving the centralized AI world. Because as we can see, AI is getting hyper centralized, y’all. Like, we are seeing the big tech companies move aggressively on this space.

Marcus: Like, we’ve not seen, um, anything. I mean, when you look at Amazon making a two and a half billion dollar [01:00:00] investment, and you just kind of don’t even blink because you’re like, that’s just what it’s going to take right now. Like you, you have to throw billions at this thing at this point, you know, to, to play.

Marcus: And so seeing the guy who, who really led the, the initial, um, who really led the initial image generation AI Movement. There’s stable diffusion. Yeah, like stability. If you’ve ever heard of stable diffusion, that’s stability. A. I, um, and, uh, and now the CEO has left. And this is the second big CEO departure in a week in a week from an A.

Marcus: I company.

Vic: And I think it’s because these are multi billion dollar value companies. Yes, but the game is over. It’s over. The, um, I, I heard It’s a rumor, but the, uh, the last one that I think the investors that got in early, they got 1. 2 times their money early, meaning a year ago in perplexity. And [01:01:00] then the ones that invested this summer, they got like 70 cents on the dollar and it was cut with Bill Gates and, you know, all the, the big Silicon Valley crazy people, um, the game’s over.

Vic: It’s Microsoft, Google. Okay. Okay.

Marcus: I just have to say, when this whole thing started, I said this. Yes. When this whole thing started, I was like, I am not investing in not one quote unquote AI company. Yeah. Because, You can’t win. Like that game is going to the big guys, period. End of story. Um, and then we will all use their tools and we will integrate their tools into our much more niche businesses where we’re actually providing value because we know the niche market, but like

Vic: a pure AI thing, are you kidding me?

Vic: Well, my counter [01:02:00] then, and what I still think today is that open source is going to be not as good, but. Pretty damn good. That’s not a counter

Marcus: to, to, to not investing in it. That’s a, that is, we

Vic: Yeah, yeah, I don’t want to invest in a, in a large language model. Right, right. But you could use an open source model if you didn’t want to play with one of these big three companies.

Marcus: Yes, but I think even more than open source, the reason why everyone is saying decentralized is because of the data ownership issues. Right? So open source just means we can all have access to the model, but we’re not part of the training process of it. Decentralized puts us into the training aspect of it.

Marcus: The data in is really how the model gets created, you know? Um, and then you somehow being in control, having some level of sovereignty over that data that goes in. So. Anyway, I’m with you insofar [01:03:00] as I don’t want to live in a world just like I don’t want look I don’t want to live in a world where where the big guys control the social networks.

Marcus: That’s why I’m on Forecaster Hey, right. I definitely don’t want to live in a world where the big guys control That’s, that’s not a world I want to, I want to live in. So I’m all about open source and I’m all about, you know, hopefully the decentralized stuff actually like manifesting, that would be amazing.

Marcus: So I’m all about this. I hope Ahmad, you know, has great success. Something great. Yes.

Vic: Yeah.

Marcus: That would be amazing. And investing in an AI company that is just AI is stupid. And it always was stupid. Yeah. Yeah. It always was stupid.

Vic: That’s

Marcus: right.

Vic: I mean, if Amazon and Meta have decided they are not going to build their own, what, what am I doing?

Vic: Dude.

Marcus: Yeah.

Vic: Yeah.

Marcus: All right. Uh, back to healthcare, uh, Nebraska medicine used AI to reduce first year nurse turnover by nearly 50%.

Vic: Yeah. [01:04:00] So I love this story because it is. It’s optimistic that they were able to use AI to make their nurses happier that reduced churn. Every health system that is listening to us right now wants to do that.

Vic: And it was really basic. Just, just get them the answers they need, tell them when they can take their vacation day, allow them to trade a shift. It is amazing how the basic like blocking and tackling. It led to a 50 percent reduction in turnover.

Marcus: Well, it also shows you how bad the baseline is. Like the baseline is awful.

Marcus: That’s right. Awful and what’s makes the you know, what makes the baseline so bad. It is the insistence that it can’t be any better

Vic: Yeah

Marcus: Like you cannot tell these people that like their systems are bad,

Vic: right? But [01:05:00] then you see a story with nebraska medical medicine. I mean, i’m sure they’re great people I had never heard of nebraska medicine before And they did a great job and I think it’s because they tried they tried to figure it out

Marcus: I mean this look we we had we had a Our friend, Ray Guzman, uh, at our, at our outer summit, and he was telling the story of Winnow.

Marcus: And it’s like, dude, it’s low, it’s low hanging fruit, friends. It’s low hanging fruit. And, and the AI is great because it optimizes, it, it, it optimizes you leveraging data that you already have. But what really matters is what questions are you asking? What is the context, right? And how good are those questions?

Marcus: that you’re asking of the system, right? And to what end? And are you willing to accept that your current models are shit? Right? Like, are you willing [01:06:00] to do that? Um, if, if you’re willing to do that, AI can be unbelievably helpful, right? But, but more so than the AI, you have to be willing to actually try something.

Marcus: Yeah. It’s pretty different. It’s the

Vic: humans that decided let’s try these new tools and try to make our nurses happier. And it had a direct, very fast, direct effect.

Marcus: All right. Last story today, the white house published a fact sheet, vice president Harris announces OMB, which is the office of management and budget OMB policy to advance governance, innovation, and risk management and federal agencies use of artificial intelligence.

Marcus: So this is a, um, a fairly long. Read so we won’t go through every single part of it, but we will include it in the show notes. I think, uh, A lot of these fact sheets are kind of like, so what, um, as I actually read through this one, I thought it was, I think it’s worth a read, and I think the reason is, it is a very [01:07:00] clear, uh, statement that A, the government is using AI.

Marcus: Like we’re definitely doing it. Um, they make, they make explicit, uh, uh, facts known. Like we are hiring chief AI officers, right? We are creating transparency around the places that we are using AI. One of the things that’s, that’s in here is you, you as a U S citizen. Yes. You can opt out of the facial recognition things at the airport because guess what?

Marcus: That’s AI, right? So they’re, they’re making more clear. That a, we are absolutely using AI. We are growing our workforce. with very strong intentionality. Um, and we’re focused on some, some key specific areas. Climate change, for example, is an area that they called out where they’re absolutely using AI to try to advance that public health, public safety.

Marcus: Right. So they’re, they’re not being, you know, uh, [01:08:00] they’re, they’re, they’re not hiding what, what their, what their areas of focus are and what the priorities are. These are the areas where we are driving responsible AI innovation. And so this to me was the first comprehensive read I had on what the administration is actually doing.

Marcus: And it’s not like a, hey, here are all the regulatory issues that you got to watch out for. Yeah, it’s more

Vic: like what our plan is. It’s our plan.

Marcus: This is what we’re doing because AI is a reality, right? Um, and throughout it, you, you, you see over and over again that they are acknowledging that we have to leverage AI to advance our government.

Marcus: Right.

Vic: Yeah, which is great. I mean, I, I don’t know how, I mean, it’s a war for talent and people are paying a ton of money for AI people, how many they’ll be able to bring on. I’m not sure, but, but I think it’s great that they are laying out this plan and making meaningful progress towards including AI into all [01:09:00] of our government stuff.

Vic: Yeah,

Marcus: I thought it was.

Vic: I mean, I wish my portfolio companies had an organized plan like this. Amen. I mean, everyone is, yeah, we’re going to figure it out, but it’s not as detailed

Marcus: as this. No, no. So actually pretty, pretty impressive. Yeah. Pretty forward thinking. Um, and, uh, I think everyone should read it because, uh, it’s the first time I was able to see sort of a comprehensive, uh, document that says these are the areas that we’re focused on, this is how we’re planning on growing the workforce, this is how we’re addressing transparency so that you know the areas where AI is actually being used, um, and This is our roadmap of what we’re doing, right?

Marcus: This is what we’ve done over the last 150 days. These are things we’re still working on in the future.

Vic: Yeah. And I’m critical a lot about the government, but this was really well done. All right, man.

Marcus: Episode 50 in the books.

Vic: Yes.

Marcus: Episode 50 in the books. We got to get our, our, our, uh, [01:10:00] our act together on guests again.

Marcus: Like, we popped out a bunch of guests and then we kind of like went back into the lull. We got to get our act together and, and get some guests on the schedule. I know we have a couple booked for the, the coming months.

Vic: Yeah. Yeah, I just, I just need to reach out if anyone’s listening and that you know of a guest, let me know.

Vic: We just have to get our act together and book them. I have three or four that have to schedule.

Marcus: Yeah. I mean, our friend Bruce Brandis actually volunteered a great guest and we just need to follow up and actually book the damn thing. So anyway, uh, thank you for being along on this health further journey with us.

Marcus: Please share it with somebody. Uh, if you haven’t already go on to Apple podcasts is where the majority of you are listening right now. Give us a rating. Give us a, give us a shout out. Let us know, you know, what, what we’re doing, but I don’t care if you say something bad in the comments, give us five stars.

Marcus: We need those five stars. Um, and, uh, yeah, we will be back next week with episode 51, uh, as we marched towards 100 and actually being able to take ourselves seriously. All right. Until [01:11:00] then.